WASHINGTON — Top Senate Republicans indicated this week they’d be open to extending one of former President Joe Biden’s signature health care policies to avoid a politically poisonous spike in insurance costs ahead of the 2026 midterm elections.
The enhanced premium tax credits, which Democrats included in President Joe Biden’s American Rescue Plan Act, reduced the cost of health insurance for many middle-class people enrolled in Obamacare exchanges. The average person who buys insurance through the exchanges is expected to pay 75% more for their premium if the tax credits expire, according to an analysis from KFF, a nonpartisan health policy research group.
The nonpartisan Congressional Budget Office has also projected that letting the subsidies lapse would lead to about 5 million Americans losing their insurance over the next 10 years.
“I am part of a small group that is looking to try to find a path forward to extend those,” said Sen. Lisa Murkowski (R-Alaska). “I think it is recognized that our failure to do that could result in some pretty precipitous increases in costs for Americans for their health insurance, and that’s not where we want to end up at the end of this year.”
“It’s not these people’s fault that they’re forced onto Obamacare in the first place and then to take away what the government promised them in terms of this credit, seems to me to be not exactly the most desirable outcome,” added Sen. Mike Rounds (R-S.D.).
The looming expiration of the tax credits was put on the back burner by Republicans during the first six months of President Donald Trump’s term as the party focused on passing his agenda of tax cuts and historic cuts to Medicaid, as well as slashing foreign aid and public broadcasting funding.
Discussions are now underway in the Senate for a bipartisan solution to a problem that could have serious ramifications for the GOP in next year’s elections, with high prices and inflation still on top of voters’ minds. They are being led by Sen. Bill Cassidy (R-La.), the chair of the Senate health committee, who has previously criticized the credits, but who is also facing voters at the ballot box next year.
Passing a bipartisan fix is easier said than done, however. For one, it’ll be costly. An estimate from CBO said it would cost $380 billion over a decade to make the subsidies permanent. Senate Republicans are eyeing a smaller fix of about $125 billion with a lower income threshold to qualify for the credit, as well as an offset to pay for it.
“I think we’ll be able to offer an appropriate offset, and I think it would be very difficult for Democrats to be able to say no to that,” Rounds said.
Many conservatives are flat-out opposed to extending the tax credits, however. Some are pushing for rolling back Obamacare more broadly, including by winding down its Medicaid expansion, in future reconciliation bills.
“Nobody’s losing coverage, that’s what’s important to me,” Sen. Rick Scott (R-Fla.) said when asked what Congress ought to do when the tax credits expire.
Even if the Senate can agree on a fix — something that would require 60 votes — passage could be more complicated in the GOP-controlled House, where there’s no guarantee that leadership would even take it up. Lawmakers could potentially tuck it into an end-of-the-year government funding bill, but that could also risk a government shutdown.
“I think that goes to the end of the calendar year, so we’ll have discussion about the issue later. But it hasn’t come up yet. But it’s on the radar,” House Speaker Mike Johnson (R-La.) told reporters this week when asked about the ACA credits.
Waiting until the end of the year to address the issue may be too late, however. While the tax credits technically expire on Dec. 31, insurers must file their final rates for health plans offered on ACA exchanges for next year by Aug. 13, according to the centrist think tank Third Way. That’s smack-dab in the middle of Congress’ annual recess.
It’s not clear where the White House stands on the issue. Getting Trump on board with extending the subsidies could help move Republican votes on Capitol Hill. A memo from a conservative advocacy organization, for example, warned this week that the benefits of the president’s tax cut law will be nullified if the subsidies are not extended and people’s health care costs go up.
Not extending the subsidies will also hand Democrats — who are already eager to run against Trump’s cuts to Medicaid — a further advantage on health care issues, particularly in purple battleground states that could determine the control of the House and Senate next year.
The issue, for now, remains a bit of a sleeper: A KFF poll conducted last month found just 28% of Americans had heard “a lot” or “some” about the credits’ potential expiration. But a full 77% of Americans, including 56% of self-identified MAGA supporters, back their extension.
“For some people, their premiums will as much as double, and people don’t have the resources in their household income in order to be able to absorb that,” Sen. Raphael Warnock (D-Ga.) told HuffPost. “Donald Trump and the Republicans are doing the opposite of what he said he was going to do. He said he was going to drive costs down. He’s driving them up every single day. So I think they’ve got a decision to make about whether they’re OK with that.”